Thursday, July 10, 2014





Asian markets cheer US deal to avoid debt default


October 17. 2013 5:36AM
Associated Press



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(AP) An eleventh hour agreement that averted a U.S. government debt default boosted Asian stock markets Thursday. European markets, which rallied the day before in anticipation of a deal, were down.


Gains in Asia were modest. The budget and debt impasse had caused jitters but markets had not sold off severely as investors and analysts largely believed U.S. lawmakers would reach agreement at the last minute, as they did in a previous budget standoff.


After a Senate vote, Congress passed and sent a waiting President Barack Obama legislation late Wednesday night to raise the $16.7 trillion debt limit and end a 16-day partial government shutdown.


The deal, which permits the Treasury to borrow normally through Feb. 7 and fund the government through Jan. 15, was reached after a month of political gridlock and just hours before a Thursday deadline to raise the borrowing limit, avoiding a potentially catastrophic debt default.


Analysts said the deal has soothed immediate worries but didn't deal with the root issue, which will result in another showdown in early 2014.


"The U.S. budget and debt drama appears to be over for now. We have a short-term extension but will likely be in a similar crisis situation early next year," said analysts at Credit Agricole CIB in Hong Kong in a market commentary. "Nevertheless, we expect market tone to improve over the near term."


Japan's Nikkei 225 rose 0.8 percent to 14,586.51 and Seoul's Kospi gained 0.3 percent to 2,040.61. Stock indexes in Australia, Taiwan and Southeast Asia also gained while Hong Kong's rally faded with the Hang Seng down 0.6 percent at 23,094.88.


In Europe, Britain's FTSE 100 shed 0.3 percent to 6,549.58. France's CAC-40 slipped 0.6 percent to 4,216.53 and Germany's DAX fell 0.6 percent to 8,792.43.


Wall Street was also set to fall after being boosted Wednesday by the U.S. agreement. Dow futures were down 0.3 percent and broader S&P 500 futures fell 0.2 percent.


In energy markets, benchmark crude for November delivery fell 51 cents to $101.78 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose by $1.08 to close at $102.29 on Wednesday.


The euro rose to $1.3621 from $1.3523 late Wednesday. The dollar dropped to 98 yen from 98.89 yen.


Associated Press


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